Sustainable Inventory Management for Environmental Impact through Partial Backordering and Multi-Trade-Credit-Period

Abstract

Incorporation of sustainable management for the rework of defective items brings long lasting benefits. In global business, there are situations when the products are procured from a global supplier. There are chances that the received lot may contain a fraction of imperfect products. These imperfect products are still valuable and can be repairable to save the environment. It is sustainable to repair imperfect items in a local repair store as compared to sending it back to the supplier. The cost of carbon emissions is also incorporated in the function to incorporate the environmental impact on total profit. Meanwhile, the supplier also offers a multi-trade-credit-period to the buyer. The developed model is sustainable and reduces the environmental impact as well as benefits for interim financing. This paper has an objective to maximize the total profit by developing a synergic economic order quantity model by considering multi-trade-credit policy, rework, and shortages simultaneously. This model can help in making decisions to enhance the performance of sustainable inventory management by controlling the cycle time and a fraction of time for a global supply chain. A non-derivative approach is employed to develop a closed-form optimal result. The numerical illustration with sensitivity analysis is also drawn to provide managerial insights into real practices.

Research on Operation and Financing Strategy of an Emission-Dependent Supply Chain under Variable Transportation Fee Strategy

“…Their results show that the retailer's initial capital has an important impact on the selection of carbon emission reduction mode. Sarkar et al [9] incorporate the cost of carbon emissions into the environmental impact on total profits to design a synergic economic order quantity model. Based on a fuzzy multi-criteria evaluation method combined with Topsis, Liang et al [36] propose a new SME financing evaluation model.…”

“…To guarantee the existence and uniqueness of solution to the optimization problem, we use the following assumptions (see [8,9,41]):…”

“…), we know that about $31.8 million of loans were provided to companies with carbon emission cap as collateral in 2017. Therefore, some scholars try to incorporate capital situation of the emission-dependent firms into their operational decision-making [8,9].Regarding the researches of 3PL firm, most scholars think that 3PL only provides logistics service for firms, which may include transportation and warehousing [10][11][12]. However, the increasing competition among 3PL firms leads to it must develop their own business scope.…”

“…), we know that about $31.8 million of loans were provided to companies with carbon emission cap as collateral in 2017. Therefore, some scholars try to incorporate capital situation of the emission-dependent firms into their operational decision-making [8,9].…”

Low Carbon Supply Chain Coordination for Imperfect Quality Deteriorating Items

“…Recently, Kazemi et al [4] considered the effect of carbon emissions on several economic order quantity (EOQ) models. Sarkar et al [5] considered warehouse emissions in the EOQ model with a rework for the defective items. The model also considered partial 2 of 24 backorder and multi-trade-credit-period.…”